RolStoppable said:
I did and it's right there. Since there are no real challengers, Nintendo doesn't need to reinvent the wheel completely, but just needs to realize the full potential of the Wii idea by refining it and releasing new IPs that create new demand. While that wouldn't be as blue ocean as the original Wii (since the hardware is an evolution and only the software would break new grounds), it would still be a sufficient strategy that leaves Nintendo without any direct competitors, thus ensuring profitability. Simply put, there was no reason for Nintendo to abandon the Wii, because there were no serious threats emerging. Here's an excerpt from the Wikipedia page: http://en.wikipedia.org/wiki/Blue_Ocean_Strategy Kim and Mauborgne argue that while traditional competition-based strategies (red ocean strategies) are necessary, they are not sufficient to sustain high performance. Companies need to go beyond competing. To seize new profit and growth opportunities they also need to create blue oceans. The authors argue that competition based strategies assume that an industry’s structural conditions are given and that firms are forced to compete within them, an assumption based on what academics call the structuralist view, or environmental determinism. To sustain themselves in the marketplace, practitioners of red ocean strategy focus on building advantages over the competition, usually by assessing what competitors do and striving to do it better. Here, grabbing a bigger share of the market is seen as a zero-sum game in which one company’s gain is achieved at another company’s loss. Hence, competition, the supply side of the equation, becomes the defining variable of strategy. Here, cost and value are seen as trade-offs and a firm chooses a distinctive cost or differentiation position. Because the total profit level of the industry is also determined by structural factors, firms principally seek to capture and redistribute wealth instead of creating wealth. They focus on dividing up the red ocean, where growth is increasingly limited. Blue ocean strategy, on the other hand, is based on the view that market boundaries and industry structure are not given and can be reconstructed by the actions and beliefs of industry players. This is what the authors call “reconstructionist view”. Assuming that structure and market boundaries exist only in managers’ minds, practitioners who hold this view do not let existing market structures limit their thinking. To them, extra demand is out there, largely untapped. The crux of the problem is how to create it. This, in turn, requires a shift of attention from supply to demand, from a focus on competing to a focus on value innovation – that is, the creation of innovative value to unlock new demand. This is achieved via the simultaneous pursuit of differentiation and low-cost. As market structure is changed by breaking the value/cost tradeoff, so are the rules of the game. Competition in the old game is therefore rendered irrelevant. By expanding the demand side of the economy new wealth is created. Such a strategy therefore allows firms to largely play a non–zero-sum game, with high payoff possibilities. |
No serious threats? Sorry but Apple and Android represent a more serious threat to Nintendo's business than Sony or MS ever did.
Simple to play arcadey games married to a button free interface simply isn't a blue ocean in the modern context any more than a superhero movie is a blue ocean for the movie business.
Candy Crush Saga may honestly be the most profitable game in the gaming sphere today, I remember reading some insane stat like 60% of UK gamers played it on their way to work every day. That's insane. It's on the Tonight Show. It's on CNN. It's parodied everywhere. This is a legit pop culture phenomenon and that's just one game.
The fact of the matter is more people will have played Candy Crush Saga or Angry Birds than ever played Wii Sports (by hook or by crook).
A blue ocean in the modern context would have to be something dramatically different from even the Wii, like a sex/porn console or a console aimed specifically at senior citizens or something (and even that might not be far enough).
Any console aimed at the player who likes simple to play games and needs a super easy interface ... is a RED ocean, and to charge $50 is asinine in today's market (even Nintendo realizes this that's why they tried different pricing options for Wii Sports/Fit U).
